ABSTRACT Chronic Hepatitis B Virus (HBV) infection is a major risk factor in development of hepatocellular carcinoma (HCC). Despite the HBV vaccine, the World Health Organization (WHO) reports 250 million people are chronically infected with HBV. Current therapies for HBV infection or treatment of liver cancer are ineffective. To reduce the risk for liver cancer, new and effective therapies are needed, targeting essential mechanisms of viral replication and liver cancer pathogenesis. In this proposal we are investigating a novel epigenetic mechanism that contributes both to HBV biosynthesis and HBV-associated liver cancer. This mechanism involves the chromatin modifying Polycomb Repressive Complex 2 (PRC2) that silences genes by H3K27 trimethylation, the DEAD box helicase DDX5 that remodels RNA protein (RNP) complexes, and the long noncoding RNA (lncRNA) HOTAIR. PRC2 silences transcription of >1000 genes and binds >9,000 lncRNAs, including HOTAIR. However, how PRC2 targets repression of specific genes is not yet understood. Our studies have identified the RNA helicase DDX5 as a regulator of PRC2-mediated gene repression, acting by stabilizing the essential PRC2 subunit SUZ12, via regulation of RNP complexes formed with HOTAIR. Significantly, knockdown of either DDX5 and/or HOTAIR enabled re-expression of specific PRC2-repressed genes, namely, EpCAM and pluripotency genes (NANOG, OCT4, and SOX2.) Concerning the role of this epigenetic mechanism in HBV infection and HCC pathogenesis, we have shown the HBV encoded X protein, a cofactor in hepatocarcinogenesis, signals the proteasomal degradation of SUZ12 protein. The downregulation of SUZ12 results in loss of PRC2 function and re-expression of EpCAM and pluripotency genes during HBV replication and in HBV-associated liver tumors. In addition to SUZ12, we have also found that DDX5 is downregulated during HBV replication and in poor prognosis HBV-induced HCCs by an unknown mechanism. Importantly, downregulation of SUZ12 and DDX5 is advantageous to virus biosynthesis. In this competitive renewal application, our working hypothesis is that DDX5 functions to stabilize SUZ12 and the PRC2/HOTAIR complex, thus promoting PRC2-mediated transcriptional repression of both cellular and viral genes. How viral infection deregulates this mechanism is not understood. Accordingly we will investigate: in Aim1, the role of DDX5 in SUZ12/PRC2 function, and how HBV infection deregulates this complex; in Aim2 the role of DDX5 in HBV replication, and in Aim3 the mechanism of DDX5 down-regulation during HBV infection, and its role in HBV-mediated tumorigenesis. Impact: The proposed studies will elucidate a novel epigenetic mechanism that regulates both HBV biosynthesis and HBV-mediated oncogenic transformation. Our studies have the potential to identify novel therapy targets for HBV infection and liver cancer, e.g., the RNA helicase DDX5 and molecules that regulate DDX5.